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Infrastructure funding where homes are being built

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The Victorian Government is creating a fairer system for property developers to contribute to funding for local infrastructure, parks and services in the areas where they build more homes.

Under the plan, communities that build more homes will receive more funding for the things they need, including:

The Victorian Government will work with key members of its Housing Affordability Partnership to deliver a statewide developer contributions model, linking more homes with more infrastructure.

While this work is being delivered, the Victorian Government will introduce a new pilot developer contribution system in the first 10 pilot Activity Centres across Melbourne, where more homes will be delivered near transport, jobs and services.

The Victorian Government has also announced a new $150 million round of the existing Growth Area Infrastructure Contributions funding for 7 of Melbourne’s fastest growing council areas.

Statewide developer contributions for local infrastructure, parks and services

Developers already contribute to the community through a system of developer contributions, paid to councils or the state.

Currently, 43 of 79 councils collect developer contributions in different ways, and there are 133 separate developer contributions in place across the state.

While this system has delivered a lot of local benefits, it’s not in the right areas and with the administrative burden adding further delays. Ultimately, it just isn’t doing the job of providing more infrastructure funding to growing suburbs.

The Victorian Government will work with key members of its Housing Affordability Partnership – the Property Council of Australia, Urban Development Institute of Australia, Housing Industry Association, Master Builders Victoria and Assemble – to deliver an approach to statewide developer contributions.

The industry working group will meet from November 2024, looking at models for change to find one that works for industry, councils, Government, and communities.

It will report back in March 2025 with options that help Victoria’s suburbs grow sustainably, by delivering community infrastructure alongside new home projects.

Joint Affordability Partnership Statement PDF 304.18 KB (opens in a new window)

Starting in 10 activity centres

While this long-term statewide reform is being designed and implemented, the Government will introduce a simpler developer contribution pilot in 10 busy areas close to jobs, transport and services where more homes are coming under the Government’s Activity Centre program.

This contribution will support the growing communities of Broadmeadows, Camberwell, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood.

Though the scheme, every home in every housing project in these communities will directly result in more funding for local infrastructure – from new roads to schools, to upgraded health services and community spaces.

The Department of Transport and Planning will advise on lists of infrastructure needs in each of these communities, where 60,000 additional homes can be delivered through the Activity Centre program by 2051.

The Activity Centre contributions will start on 1 January 2027, giving Government the time to consult and industry time to prepare.

The change will deliver more funding for local infrastructure in these centres while Government and industry work on a long-term statewide system.

New Growth Area Infrastructure Contributions round

Later this year, the Victorian Government will open a new $150 million round of Growth Area Infrastructure Contributions (GAIC) funding for communities in Cardinia, Casey, Hume, Melton, Mitchell, Whittlesea, and Wyndham.

Through this scheme, developers contribute to funding for important infrastructure projects in some of our city’s fastest-growing communities.

The latest $150 million GAIC round will focus primarily on transport, like buses, services, stations, interchanges, intersections, roads, bike paths and walking paths.

Successful projects and final funding amounts will be confirmed and announced in 2025.

Updated 27 November 2024

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